Argent Trust Denied ERISA Arbitration by Divided Appeals Court

Argent Trust Co. lost its appeal seeking to force arbitration in a dispute over a $242 million employee stock ownership plan transaction, when the Second Circuit on Wednesday invalidated the plan’s arbitration provision.

The Strategic Financial Solutions LLC stock plan’s arbitration clause is unenforceable because it prevents workers from pursuing relief on behalf of the plan as a whole, the US Court of Appeals for the Second Circuit said in a 2-1 split opinion. The right to pursue plan-wide relief is guaranteed by the Employee Retirement Income Security Act, and a provision blocking participants from seeking relief beyond their ...